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Please show work to explain answer... thanks. . Calla Company produces skateboards that sell for $62 per unit. The company currently has the capacity to

Please show work to explain answer... thanks.

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Calla Company produces skateboards that sell for $62 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 81,500 skateboards per year. Annual costs for 81,500 skateboards follow Direct materials Direct labor Overhead Selling expenses Administrative expenses $945,400 603,100 943,000 549,000 467,000 Total costs and expenses $3,507,500 A new retail store has offered to buy 18,500 of its skateboards for S57 per unit. The store is in a different market from Calla's regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following Direct materials and direct labor are 100% variable .40 percent of overhead is fixed at any production level from 81,500 units to 100,000 units; the remaining 60% of annual overhead costs are variable with respect to volume . Selling expenses are 60% variable with respect to number of units sold, and the other 40% of selling expenses are fixed .There will be an additional $2.9 per unit selling expense for this order. .Administrative expenses would increase by a $970 fixed amount. Required: Prepare a three-column comparative income statement that reports the following a. Annual income without the special order. b. Annual income from the special order c. Combined annual income from normal business and the new business (Do not round your intermediate calculation round your cost and expenses values to nearest whole decimal places.) CALLA COMPANY COMPARATIVE INCOME STATEMENTS Additional Combined Total Normal Volume Volume $5,053,000 1054,500 6,107,500 Costs and expenses Selling expenses Direct materials Direct labor Overhead Administrative expenses 549,000 945,400 603,100 943,000 467,000 549,000 945,400 603,100 943,000 467,970 970 Total costs and expenses Operating income 3,507,500 970 3,508,470 $1,545,5001,053,530 $ 2,599,030

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